UNITED STATES DISTRICT COURT EASTERN DIVISION ELIOT ... · RAZZAK KHADER, ) THEODORE CARDENAS, ) JOHN WELCH, ) AMANDA FANARO, and ) KRISTIN DAUGHERTY ) COUNT ONE . The SPECIAL SEPTEMBER

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

UNITED STATES OF AMERICA ) No. )

vs. ) Violations: Title 18, United States Code, ) Sections 1343 and 2

YASEEN AHMED, ) ELIOT HIGUEROS, ) RAZZAK KHADER, ) THEODORE CARDENAS, ) JOHN WELCH, ) AMANDA FANARO, and ) KRISTIN DAUGHERTY )

COUNT ONE

The SPECIAL SEPTEMBER 2011 GRAND JURY charges:

1. At times material to this indictment:

a. Defendant YASEEN AHMED was a managing officer and co-owner of 4725

S. Michigan LLC, an Illinois limited liability company that owned a condominium building located

at 4725 South Michigan Avenue, Chicago, Illinois. Defendant AHMED was also the president of

High Point Developers, Inc., Urban Red Construction Corp. (a/k/a “Urban Red Developers”), and

Vertex Investment Group, Inc., all Illinois corporations.

b. Defendant ELIOT HIGUEROS was the owner of E&H Distributors, Inc.

(a/k/a “ENH Distributors, Inc.,” a/k/a “ENH Services, Inc.”), an Illinois corporation, and Zeal

Holdings, LLC and Zeal Management, LLC (a/k/a “Zeal Management Corp.”), both Illinois limited

liability companies.

c Defendant RAZZAK KHADER was a licensed loan officer whose

responsibilities included arranging for borrowers to obtain mortgage loans from lenders.

d. Defendant THEODORE CARDENAS was a licensed loan officer whose

responsibilities included arranging for borrowers to obtain mortgage loans from lenders.

e. Washington Mutual Bank, National City Mortgage, Lehman Brothers Bank,

IndyMac Bank FSB, Countrywide Bank FSB, Citibank, and Fifth Third Bank were financial

institutions, the deposits of which were insured by the Federal Deposit Insurance Corporation.

f. Washington Mutual Bank, National City Mortgage, Exclusive Bancorp, Inc.,

CitiMortgage, Inc., Fifth Third Mortgage Company, American Broker’s Conduit, Lehman Brothers

Bank, First Magnus Financial Corporation, Wachovia Mortgage Corporation, IndyMac Bank FSB,

Countrywide Home Loans, Inc., Countrywide Bank FSB, Gateway Capital Mortgage Corporation,

and First Franklin Financial Corporation were lenders in the business of issuing mortgage loans to

borrowers across the United States, including in the Northern District of Illinois.

g. Lenders required applicants for mortgage loans to provide truthful information

in loan applications and supporting documents, including information concerning applicants’

employment, income, assets, liabilities, intention to occupy the property purchased, and ownership

interests in properties, and the source of any down payment, which information was material to the

decision to approve and fund mortgage loans.

h. Lenders sold the mortgage loans to other lenders and institutions

(“successors”). Lenders disclosed that the mortgage loans could be sold and the likelihood that the

mortgage loans would be sold. The information provided in loan applications and supporting

documents, including information concerning borrower’s employment, income, assets, liabilities,

payment history, intention to occupy the property purchased, and the sale price, was material to the

successors’ decisions to purchase the mortgage loans.

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2. Beginning in or around 2006, and continuing through at least 2008, at Chicago, in

the Northern District of Illinois, Eastern Division, and elsewhere,

YASEEN AHMED, ELIOT HIGUEROS, RAZZAK KHADER,

THEODORE CARDENAS, JOHN WELCH,

AMANDA FANARO, and KRISTIN DAUGHERTY,

defendants herein, together with others known and unknown to the Grand Jury, devised, intended

to devise, and participated in a scheme to defraud and to obtain money and property from lenders,

including financial institutions, by means of materially false and fraudulent pretenses,

representations, and promises, and by material omissions, which scheme is further described below.

3. It was part of the scheme that defendants YASEEN AHMED, ELIOT HIGUEROS,

RAZZAK KHADER, THEODORE CARDENAS, JOHN WELCH, AMANDA FANARO, and

KRISTIN DAUGHERTY, together with persons known and unknown to the grand jury, fraudulently

obtained approximately 35 mortgage loans totaling at least approximately $8,820,630 from lenders,

including financial institutions, by making materially false representations and omissions in loan

applications, supporting documents, and HUD-1 settlement statements concerning the buyers’

employment, financial condition, assets, true source of down payments, and intention to occupy the

property, and for the purpose of executing the scheme caused interstate wire transmissions.

4. It was further part of the scheme that defendant ELIOT HIGUEROS knowingly

recruited individuals, including defendants JOHN WELCH, AMANDA FANARO, and KRISTIN

DAUGHERTY, as well Individual A through Individual G (collectively the “Nominee Buyers”),

to serve as nominee buyers for condominium units located at 4725 South Michigan Avenue, 3318

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West Monroe Street, 7919-7921 South Phillips Avenue, 1349 North Sedgwick Street, and 2012 West

Thomas Street, all located in Chicago, Illinois (collectively the “Subject Properties”), some of which

were co-owned by defendant YASEEN AHMED, and to serve as nominee borrowers on mortgage

loans to be used to finance the purchase of those condominium units, knowing that the transactions

would be financed by making false statements to lenders to obtain mortgage loans.

5. It was further part of the scheme that defendants YASEEN AHMED and ELIOT

HIGUEROS, and on occasion defendant RAZZAK KHADER, knowingly referred the Nominee

Buyers to loan officers, including defendants RAZZAK KHADER and THEODORE CARDENAS,

to arrange for the Nominee Buyers to fraudulently obtain mortgage loans from lenders to finance

the purchases of the Subject Properties, knowing that false statements would be made to the lenders

to obtain the mortgage loans.

6. It was further part of the scheme that defendant ELIOT HIGUEROS paid the

Nominee Buyers to purchase the Subject Properties knowing that such payments would be concealed

from the lenders who financed the transactions.

7. It was further part of the scheme that defendants YASEEN AHMED, ELIOT

HIGUEROS, RAZZAK KHADER, THEODORE CARDENAS, JOHN WELCH, AMANDA

FANARO, and KRISTIN DAUGHERTY knowingly prepared and submitted, and caused to be

prepared and submitted, to mortgage lenders, documents containing materially false and fraudulent

representations so that the Nominee Buyers would falsely appear qualified for mortgage loans to

purchase the Subject Properties, including

(a) loan applications that contained materially false and fraudulent

representations concerning, among other things, the Nominee Buyers’

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income, assets, liabilities, employment, and intention to occupy the Subject

Properties; and

(b) HUD-1 settlement statements that, among other things, failed to disclose the

true source of down payments and payments provided to the Nominee Buyers

for purchasing the Subject Properties.


HIGUEROS knowingly disbursed, and caused to be disbursed, proceeds of the fraud to themselves

and to their companies at the closings of the Subject Properties.

9. It was further part of the scheme that defendant YASEEN AHMED paid defendant

RAZZAK KHADER for fraudulently qualifying certain of the Nominee Buyers knowing that these

payments would not be disclosed to the lenders who financed the transactions.

Units Purchased by Defendant JOHN WELCH

10. It was further part of the scheme that defendant ELIOT HIGUEROS recruited

defendant JOHN WELCH to purchase four condominium units located at 4725 South Michigan

Avenue, Chicago, Illinois – Units 3F, 3C, GD, and 2F – knowing that the transactions would be

financed by making false statements to lenders to obtain mortgage loans.


HIGUEROS knowingly arranged for loan officers, including defendant THEODORE CARDENAS,

to fraudulently qualify defendant WELCH for approximately $621,922 in mortgage loan proceeds

to purchase Units 3F, 3C, GD, and 2F, knowing that false statements would be made to the lenders

to obtain the mortgage loans.


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HIGUEROS, THEODORE CARDENAS, and JOHN WELCH knowingly prepared and submitted,

and caused to be prepared and submitted, loan applications in defendant WELCH’s name to lenders,

including Countrywide Home Loans, Inc., First Magnus Financial Corporation, First Franklin

Financial Corporation, and IndyMacBank FSB, in order to fraudulently qualify defendant WELCH

for mortgage loans to finance the purchase of Units 3F, 3C, GD, and 2F, which loan applications

contained materially false and fraudulent information about defendant WELCH, including

information that defendant WELCH:

(a) held Chase bank accounts carrying balances of between $12,000 and

$25,000; and

(b) had no ownership interest in any property.

As defendants AHMED, HIGUEROS, CARDENAS, and WELCH knew, the information

concerning defendant WELCH’s assets was false.


HIGUEROS, THEODORE CARDENAS, and JOHN WELCH knowingly prepared and submitted,

and caused to be prepared and submitted, HUD-1 Settlement Statements that, among other things,

failed to disclose the true source of down payments and payments made to defendant WELCH for

purchasing Units 3F, 3C, GD, and 2F.

14. It was further part of the scheme that through submission of fraudulent loan

applications and supporting documents, defendants YASEEN AHMED, ELIOT HIGUEROS,

THEODORE CARDENAS, and JOHN WELCH knowingly caused:

(a) Countrywide Home Loans, Inc., on or about May 3, 2007, to fund a mortgage

loan in the amount of approximately $140,849 to finance defendant

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WELCH’s purchase of Unit 3F;

(b) First Magnus Financial Corporation, on or about May 14, 2007, to fund a

mortgage loan in the amount of approximately $157,177 to finance defendant

WELCH’s purchase of Unit 3C;

(c) First Franklin Financial Corporation, on or about June 5, 2007, to fund a


WELCH’s purchase of Unit GD; and

(d) IndyMac Bank FSB, on or about June 5, 2007, to fund a mortgage loan in the

amount of approximately $165,929 to finance defendant WELCH’s purchase

of Unit 2F.


applications and supporting documents, defendants YASEEN AHMED and ELIOT HIGUEROS

knowingly caused the title company to make the following disbursements of fraudulently obtained

mortgage loan proceeds:

(a) for Unit 3F, approximately $22,375 to ENH Services Inc.; approximately

$22,375 to Zeal Management LLC; and approximately $21,471 to 4725 S.

Michigan LLC;

(b) for Unit 3C, approximately $22,375 to ENH Services Inc.; approximately


Michigan LLC;

(c) for Unit GD, approximately $22,000 to ENH Services Inc.; approximately


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Michigan LLC; and

(d) Unit 2F: approximately $21,910 to ENH Services Inc.; approximately


Michigan LLC.

16. It was further part of the scheme that defendant ELIOT HIGUEROS knowingly paid

defendant JOHN WELCH for each property defendant WELCH purchased without disclosing such

payments to the lenders who financed the transactions.

Units Purchased by Defendant AMANDA FANARO


defendant AMANDA FANARO to purchase five condominium units located at 4725 South

Michigan Avenue, Chicago, Illinois – Units 2D, GA, 4A, 3D, and 1D – and three condominium units

located at 3318 W. Monroe Street, Chicago, Illinois – Units 3, 2, and G – knowing that the

transactions would be financed by making false statements to lenders to obtain mortgage loans.


HIGUEROS knowingly arranged for loan officers, including RAZZAK KHADER and THEODORE

CARDENAS, to fraudulently qualify defendant FANARO for approximately $1,629,746 in

mortgage loans to purchase Units 2D, GA, 4A, 3D, 3, 1D, 2, and G, knowing that false statements

would be made to the lenders to obtain the mortgage loans.


HIGUEROS, RAZZAK KHADER, THEODORE CARDENAS, and AMANDA FANARO

knowingly prepared and submitted, and caused to be prepared and submitted, loan applications in

defendant FANARO’s name to lenders, including Fifth Third Mortgage Company, American

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Broker’s Conduit, CitiMortgage, Inc., Lehman Brother’s Bank, IndyMac Bank FSB, Washington

Mutual Bank, Countrywide Home Loans, Inc., and Wachovia Mortgage Corporation, to finance the

purchase of Units 2D, GA, 4A, 3D, 3, 1D, 2, and G, which loan applications contained materially

false and fraudulent information about defendant FANARO, including, that defendant FANARO:

(a) intended to use the properties as her primary residence;

(b) was employed as an “account executive” or “area district manager” at E&H

Distributors earning between $4,800 and $6,500 gross income per month;

(c) held bank accounts carrying balances between $15,000 and $36,254; and

(d) had no ownership interest in any property.

As defendants AHMED, HIGUEROS, KHADER, CARDENAS, and FANARO knew, the

information concerning defendant FANARO’s employment, income, assets, and intent to occupy

the units was false.


HIGUEROS, RAZZAK KHADER, THEODORE CARDENAS, and AMANDA FANARO

knowingly prepared and submitted, and caused to be prepared and submitted, HUD-1 Settlement

Statements that, among other things, failed to disclose the true source of down payments and

payments made to defendant FANARO for purchasing Units 2D, GA, 4A, 3D, 3, 1D, 2, and G.



RAZZAK KHADER, THEODORE CARDENAS, and AMANDA FANARO knowingly caused:

(a) Fifth Third Mortgage Company, on or about June 12, 2007, to fund a


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FANARO’s purchase of Unit 2D;

(b) American Broker’s Conduit, on or about June 14, 2007, to fund a mortgage


FANARO’s purchase of Unit GA;

(c) CitiMortgage Inc., on or about June 14, 2007, to fund a mortgage loan in the

amount of approximately $209,554 to finance defendant FANARO’s

purchase of Unit 4A;

(d) Lehman Brother’s Bank, on or about June 15, 2007, to fund a mortgage loan

in the amount of approximately $205,648 to finance defendant FANARO’s

purchase of Unit 3D;

(e) IndyMac Bank FSB, on or about June 29, 2007, to fund a mortgage loan in

the amount of approximately $226,613 to finance defendant FANARO’s

purchase of Unit 3;

(f) Washington Mutual Bank, on or about July 13, 2007, to fund a mortgage loan

in the amount of approximately $196,628 to finance defendant FANARO’s

purchase of Unit 1D;

(g) Countrywide Home Loans, Inc., on or about July 26, 2007, to fund a


FANARO’s purchase of Unit 2; and

(h) Wachovia Mortgage Corporation, on or about July 27, 2007, to fund a


FANARO’s purchase of Unit G.

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(a) for Unit 2D, approximately $105,381 to 4725 S. Michigan LLC;

(b) for Unit GA, approximately $104,695 to 4725 S. Michigan LLC;

(c) for Unit 4A, approximately $104,977 to 4725 S. Michigan LLC;

(d) for Unit 3D, approximately $103,542 to 4725 S. Michigan LLC;

(e) for Unit 3, approximately $68,000 to High Point Developers;

(f) for Unit 2, approximately $68,500 to High Point Developers;

(g) for Unit G, approximately $69,500 to High Point Developers; and

(h) for Unit 1D, approximately $2,800 to Zeal Management and approximately

$88,458 to 4725 S. Michigan LLC.


defendant AMANDA FANARO for each property defendant FANARO purchased without

disclosing such payments to the lenders who financed the transactions.

Units Purchased by Defendant KRISTIN DAUGHERTY


defendant KRISTIN DAUGHERTY to purchase eight condominium units located at 4725 South

Michigan Avenue, Chicago, Illinois – Units 4B, 4F, 2B, 1F, 1B, 1C, 3B, and 2C – knowing that the

transactions would be financed by making false statements to lenders to obtain mortgage loans.


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HIGUEROS knowingly arranged for loan officers, including RAZZAK KHADER and THEODORE

CARDENAS, to fraudulently qualify defendant DAUGHERTY for approximately $1,369,218 in

mortgage loans to purchase Units 4B, 4F, 2B, 1F, 1B, 1C, 3B, and 2C, knowing that false statements

would be made to the lenders to obtain the mortgage loans.


HIGUEROS, RAZZAK KHADER, THEODORE CARDENAS, and KRISTIN DAUGHERTY

knowingly prepared and submitted, and caused to be prepared and submitted, loan applications in

defendant DAUGHERTY’s name to lenders, including IndyMac Bank FSB, First Magnus Financial

Corporation, CitiMortgage, Inc., Fifth Third Mortgage Company, Countrywide Home Loans, Inc.,

American Brother’s Conduit, Lehman Brothers Bank, and Washington Mutual Bank, to finance the

purchase of Units 4B, 4F, 2B, 1F, 1B, 1C, 3B, and 2C, which loan applications contained materially

false and fraudulent information about defendant DAUGHERTY, including that defendant

DAUGHERTY:

(a) intended to use the properties as her primary residence;

(b) was employed as an “account executive” at E&H Distributors earning

between $5,000 and $6,000 in gross income per month;

(c) held bank accounts carrying balances between $6,100 and $17,100; and


As defendants AHMED, HIGUEROS, KHADER, CARDENAS, and DAUGHERTY knew, the

information concerning defendant DAUGHERTY’s employment, income, assets, and intent to

occupy the units was false.


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HIGUEROS, RAZZAK KHADER, THEODORE CARDENAS, and KRISTIN DAUGHERTY

knowingly prepared and submitted, and caused to be prepared and submitted, HUD-1 Settlement

Statements that, among other things, failed to disclose the true source of down payments and

payments made to defendant DAUGHERTY for purchasing Units 4B, 4F, 2B, 1F, 1B, 1C, 3B, and

2C.



RAZZAK KHADER, THEODORE CARDENAS, and KRISTIN DAUGHERTY knowingly caused:

(a) IndyMac Bank FSB, on or about April 30, 2007, to fund a mortgage loan in

the amount of approximately $177,647 to finance defendant

DAUGHERTY’S purchase of Unit 4B;

(b) First Magnus Financial Corporation, on or about April 30, 2007, to fund a


DAUGHERTY’S purchase of Unit 4F;

(c) CitiMortgage Inc., on or about May 3, 2007, to fund a mortgage loan in the

amount of approximately $171,096 to finance defendant DAUGHERTY’S

purchase of Unit 2B;

(d) Fifth Third Mortgage Company, on or about May 7, 2007, to fund a mortgage


DAUGHERTY’S purchase of Unit 1F;

(e) Countrywide Home Loans, Inc., on or about May 11, 2007, to fund a


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DAUGHERTY’S purchase of Unit 1B;

(f) American Broker’s Conduit, on or about May 14, 2007, to fund a mortgage


DAUGHERTY’S purchase of Unit 1C;

(g) Lehman Brothers Bank, on or about May 14, 2007, to fund a mortgage loan

in the amount of approximately $175,276 to finance defendant

DAUGHERTY’S purchase of Unit 3B; and

(h) Washington Mutual Bank, on or about June 5, 2007, to fund a mortgage loan

in the amount of approximately $158,975 to finance defendant

DAUGHERTY’S purchase of Unit 2C.





(a) for Unit 4B, approximately $22,584 to ENH Services Inc.; approximately


Michigan LLC;

(b) for Unit 4F, approximately $22,717 to ENH Services Inc.; approximately

$22,717 to Zeal Management LLC; and approximately $159 to 4725 S.

Michigan LLC;

(c) for Unit 2B, approximately $22,375 to ENH Services Inc.; approximately


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Michigan LLC;

(d) for Unit 1F, approximately $22,375 to ENH Services Inc.; approximately


Michigan LLC;

(e) for Unit 1B, approximately $22,375 to ENH Services Inc.; approximately


Michigan LLC;

(f) for Unit 1C, approximately $22,375 to ENH Services Inc.; approximately


Michigan LLC;

(g) for Unit 3B: approximately $22,098 to ENH Services Inc.; approximately


Michigan LLC; and

(h) for Unit 2C: approximately $22,375 to ENH Services Inc.; approximately


Michigan LLC.


defendant KRISTIN DAUGHERTY for each property defendant DAUGHERTY purchased without

disclosing such payments to the lenders who financed the transactions.

Units Purchased By Individual A


Individual A to purchase four condominium units located at 4725 South Michigan Avenue, Chicago,

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Illinois – Units 1A, GC, 2E, and 1E – knowing that the transactions would be financed by making

false statements to lenders to obtain mortgage loans.


HIGUEROS knowingly arranged for loan officers to fraudulently qualify Individual A for

approximately $643,042 in mortgage loans to purchase Units 1A, GC, 2E, and 1E, knowing that

false statements would be made to the lenders to obtain the mortgage loans.


HIGUEROS knowingly prepared and submitted, and caused to be prepared and submitted, loan

applications in Individual A’s name to lenders, including Exclusive Bancorp Inc., American

Broker’s Conduit, National City Mortgage, and Washington Mutual Bank, to finance the purchase

of Units 1A, GC, 2E, and 1E, which loan applications contained materially false and fraudulent

information about Individual A, including that Individual A:

(a) intended to use the properties as his/her primary residence;

(b) earned between $5,200 and $5,800 gross income per month;

(c) held a Chase bank account carrying balances between $10,300 and $17,000;

and


As defendants AHMED and HIGUEROS knew, the information concerning Individual A’s income,

assets, and intent to occupy the units was false.


HIGUEROS knowingly prepared and submitted, and caused to be prepared and submitted, HUD-1

Settlement Statements that, among other things, failed to disclose the true source of down payments

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and payments made to Individual A for purchasing Units 1A, GC, 2E, and 1E.



knowingly caused:

(a) Exclusive Bancorp Inc., on or about April 20, 2007, to fund a mortgage loan

in the amount of approximately $204,250 to finance Individual A’s purchase

of Unit 1A;

(b) American Broker’s Conduit, on or about April 30, 2007, to fund a mortgage

loan in the amount of approximately $206,669 to finance Individual A’s

purchase of Unit GC;

(c) National City Mortgage, on or about May 11, 2007, to fund a mortgage loan


of Unit 2E; and

(d) Washington Mutual Bank, on or about July 20, 2007, to fund a mortgage loan


of Unit 1E.





(a) for Unit 1A, approximately $33,672 to ENH Services Inc.; approximately

$17,200 to Zeal Management Group; and approximately $20,000 to Urban

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Red Construction;

(b) for Unit GC, approximately $27,275 to ENH Services Inc.; approximately


Michigan LLC;

(c) for Unit 2E: approximately $20,215 to ENH Services Inc.; approximately

$20,215 to Zeal Management LLC; and approximately $147 to 4725 S.

Michigan LLC; and

(d) for Unit 1E, approximately $73,353 to 4725 S. Michigan LLC.


Individual A for each property Individual A purchased without disclosing such payments to the

lenders who financed the transactions.

Units Purchased By Individual B


Individual B to purchase two condominium units located at 4725 South Michigan Avenue, Chicago,

Illinois – Units GB and 3E– knowing that the transactions would be financed by making false

statements to lenders to obtain mortgage loans.


HIGUEROS, and RAZZAK KHADER knowingly arranged for loan officers to fraudulently qualify

Individual B for approximately $291,050 in mortgage loans to purchase Units GB and 3E, knowing

that false statements would be made to the lenders to obtain the mortgage loans.


HIGUEROS, and RAZZAK KHADER knowingly prepared and submitted, and caused to be

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prepared and submitted, loan applications in Individual B’s name to lenders, including Countrywide

Bank FSB and CitiMortgage, Inc., to finance the purchase of Units GB and 3E, which loan

applications contained materially false and fraudulent information about Individual B, including that

Individual B:


(b) was employed at E&H Distributors as an “officer manager” earning between

$4,650 and $4,750 gross income per month;

(c) held a U.S. Bank bank account carrying a balance of $23,546; and


As defendants AHMED, HIGUEROS, and KHADER knew, the information concerning Individual

B’s employment, income, assets, and intent to occupy the units was false.



prepared and submitted, HUD-1 Settlement Statements that, among other things, failed to disclose

the true source of down payments and payments made to Individual B for purchasing Units GB and

3E.


applications and supporting documents, defendants YASEEN AHMED, ELIOT HIGUEROS, and

RAZZAK KHADER knowingly caused:

(a) Countrywide Bank FSB, on or about October 2, 2007, to fund a mortgage

loan in the amount of approximately $169,794 to finance Individual B’s

purchase of Unit GB; and

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(b) CitiMortgage Inc., on or about October 2, 2007, to fund a mortgage loan in

the amount of approximately $121,255 to finance Individual B’s purchase of

Unit 3E.





(a) for Unit GB, approximately $66,421 to 4725 S. Michigan LLC; and

(b) for Unit 3E, approximately $43,016 to 4725 S. Michigan LLC.


Individual B for each property Individual B purchased without disclosing such payments to the


Units Purchased By Individual C


Individual C to purchase two condominium units located at 4725 South Michigan Avenue, Chicago,

Illinois – Units 2A and 4E– knowing that the transactions would be financed by making false



HIGUEROS knowingly arranged for loan officers, including defendants RAZZAK KHADER and

THEODORE CARDENAS, to fraudulently qualify Individual C for approximately $329,185 in

mortgage loan proceeds to purchase Units 2A and 4E, knowing that false statements would be made

to the lenders to obtain the mortgage loans.

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HIGUEROS, RAZZAK KHADER, and THEODORE CARDENAS knowingly prepared and

submitted, and caused to be prepared and submitted, loan applications in Individual C’s name to

lenders, including First Magnus Financial Corporation and CitiMortgage, Inc., to finance the

purchase of Units 2A and 4E, which loan applications contained materially false and fraudulent

information about Individual C, including that Individual C:


(b) held bank accounts carrying a balance of between $15,000 and $30,000; and

(c) had no ownership interest in any property.

As defendants AHMED, HIGUEROS, KHADER, and CARDENAS knew, the information

concerning Individual C’s assets and intent to occupy the units was false.


HIGUEROS, RAZZAK KHADER, and THEODORE CARDENAS knowingly prepared and

submitted, and caused to be prepared and submitted, HUD-1 Settlement Statements that, among

other things, failed to disclose the true source of down payments and payments made to Individual

C for purchasing Units 2A and 4E.



RAZZAK KHADER, and THEODORE CARDENAS knowingly caused:

(a) First Magnus Financial Corp., on or about August 3, 2007, to fund a

mortgage loan in the amount of approximately $209,115 to finance

Individual C’s purchase of Unit 2A; and

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(b) CitiMortgage Inc., on or about October 10, 2007, to fund a mortgage loan in

the amount of approximately $120,070 to finance Individual C’s purchase of

Unit 4E.





(a) for Unit 2A, approximately $15,250 to defendant AHMED and

approximately $83,127 to 4725 S. Michigan LLC; and

(b) for Unit 3E, approximately $72,968 to 4725 S. Michigan LLC.


Individual C for each property Individual C purchased without disclosing such payments to the


Units Purchased By Individual D


Individual D to purchase two condominium units located at 7919 South Phillips Avenue, Chicago,

Illinois – Units 3E and 2– knowing that the transactions would be financed by making false




Individual D for approximately $462,247 in mortgage loans to purchase Units 3E and 2, knowing

that false statements would be made to the lenders to obtain the mortgage loans.

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HIGUEROS, and RAZZAK KHADER, knowingly prepared and submitted, and caused to be

prepared and submitted, loan applications in Individual D’s name to lenders, including

CitiMortgage, Inc. and Fifth Third Mortgage Company, to finance the purchase of Units 3E and 2,

which loan applications contained materially false and fraudulent information about Individual D,

including that Individual D:


(b) was employed at E&H Distributors as an “operations manager” earning

between $4,500 and $4,950 gross income per month;

(c) held a LaSalle Bank bank account carrying a balance of between $35,000 and

$42,000; and



D’s employment, income, assets, and intent to occupy the units was false.


HIGUEROS and RAZZAK KHADER knowingly prepared and submitted, and caused to be prepared

and submitted, HUD-1 Settlement Statements that, among other things, failed to disclose the true

source of down payments and payments made to Individual D for purchasing Units 3E and 2.




(a) CitiMortgage Inc., on or about November 9, 2007, to fund a mortgage loan

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in the amount of approximately $231,895 to finance Individual D’s purchase

of Unit 3E; and

(b) Fifth Third Mortgage Company, on or about November 15, 2007, to fund a

mortgage loan in the amount of approximately $230,351 to finance

Individual D’s purchase of Unit 2.



knowingly caused title companies to make the following disbursements of fraudulently obtained


(a) for Unit 3E, approximately $90,850 to High Point Developers; and

(b) for Unit 2, approximately $92,555 to High Point Developers.


Individual D for each property Individual D purchased without disclosing such payments to the


Units Purchased By Individual E


Individual E to purchase three condominium units located at 7919-7921 South Phillips Avenue,

Chicago, Illinois – Units 2 and 3 at 7921 South Phillips Avenue and Unit 1 at 7919 South Phillips

Avenue – knowing that the transactions would be financed by making false statements to lenders

to obtain mortgage loans.



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Individual E for approximately $711,422 in mortgage loans to purchase the three condominiums,

knowing that false statements would be made to the lenders to obtain the mortgage loans.



prepared and submitted, loan applications in Individual E’s name to lenders, including CitiMortgage,

Inc. and Lehman Brothers Bank, to finance the purchase of Units 2 and 3 at 7921 South Phillips

Avenue and Unit 1 at 7919 South Phillips Avenue, which loan applications contained materially

false and fraudulent information about Individual E, including that Individual E:


(b) was employed at Zeal Management as a “general manager,” an “office

manager,” and an “operations manager” earning between $6,420 and $6,950

gross income per month;

(c) held bank accounts carrying balances of between $31,152 and $32,000; and



E’s employment, income, assets, and intent to occupy the units was false.



prepared and submitted, HUD-1 Settlement Statements that, among other things, failed to disclose

the true source of down payments and payments made to Individual E for purchasing Units 2 and

3 at 7921 South Phillips Avenue and Unit 1 at 7919 South Phillips Avenue.


25



(a) CitiMortgage Inc., on or about December 13, 2007, to fund a mortgage loan

in the amount of approximately $241,605 to finance Individual E’s purchase

of Unit 2 at 7921 South Phillips Avenue;

(b) Lehman Brothers Bank, on or about November 26, 2007, to fund a mortgage

loan in the amount of approximately $242,800 to finance Individual E’s

purchase of Unit 3 at 7921 South Phillips Avenue; and

(c) CitiMortgage Inc., on or about March 11, 2008, to fund a mortgage loan in

the amount of approximately $227,016 to finance Individual E’s purchase of

Unit 1 at 7919 South Phillips Avenue.





(a) for Unit 3 at 7921 South Phillips Avenue, approximately $90,975 to High

Point Developers;

(b) for Unit 2 at 7921 South Phillips Avenue, approximately $90,975 to High

Point Developers; and

(c) for Unit 1 at 7919 South Phillips Avenue, approximately $98,858 to High

Point Developers.


26

Individual E for each property Individual E purchased without disclosing such payments to the


Property Purchased By Individual F


Individual F to purchase a property located at 2012 West Thomas Street, Chicago, Illinois, knowing

that the transaction would be financed by making false statements to the lender to obtain a mortgage

loan.

67. It was further part of the scheme that defendant ELIOT HIGUEROS knowingly

arranged for a loan officer to fraudulently qualify Individual F for approximately $1,751,987 in

mortgage loan proceeds to purchase 2012 West Thomas Street, Chicago, Illinois, knowing that false

statements would be made to the lenders to obtain the mortgage loan.

68. It was further part of the scheme that, on or about January 9, 2008, defendant ELIOT

HIGUEROS knowingly caused to be prepared and submitted a loan application in the name of

Individual F to Washington Mutual Bank, in order to fraudulently obtain a mortgage loan in the

amount of $1,751,987 to finance Individual F’s purchase of 2012 West Thomas Street, Chicago,

Illinois, which loan application contained materially false and fraudulent information about

Individual F, including that Individual F:

(a) intended to use the property as his/her primary residence;

(b) was employed as the “senior financial operations manager” at E&H

Distributors earning $20,500 gross income per month; and

(c) held Citibank bank accounts carrying a combined balance of approximately

$1,050,000.

27

As defendant ELIOT HIGUEROS knew, the information concerning Individual F’s employment,

income, assets, and intent to occupy the residence was false.

69. It was further part of the scheme that defendants ELIOT HIGUEROS knowingly

caused to be prepared and submitted, a HUD-1 Settlement Statement that, among other things, failed

to disclose the true source of the down payment and the payment made to Individual F for

purchasing 2012 West Thomas Street, Chicago, Illinois.

70. It was further part of the scheme that, on or about January 9, 2008, as a result of the

submission of the fraudulent loan application and supporting documents, defendant ELIOT

HIGUEROS knowingly caused Washington Mutual Bank to fund a mortgage loan in the amount of

approximately $1,751,987 to finance Individual F’s purchase of 2012 West Thomas Street, Chicago,

Illinois.

Property Purchased By Individual G


Individual G to purchase a property located at 1349 North Sedgwick Street, Unit 4N, Chicago,

Illinois, knowing that the transaction would be financed by making false statements to the lender to

obtain a mortgage loan.


HIGUEROS knowingly arranged for a loan officer to fraudulently qualify Individual G for

approximately $1,010,811 in mortgage loan proceeds to purchase 1349 North Sedgwick Street, Unit

4N, Chicago, Illinois, knowing that false statements would be made to the lenders to obtain the

mortgage loan.

73. It was further part of the scheme that, on or about June 24, 2008, defendants

28

YASEEN AHMED and ELIOT HIGUEROS knowingly caused to be prepared and submitted a loan

application in the name of Individual G to Gateway Capital Mortgage Corporation, in order to

fraudulently obtain a mortgage loan in the amount of $1,010,811 to finance Individual G’s purchase

of 1349 North Sedgwick Street, Unit 4N, Chicago, Illinois, which loan application contained

materially false and fraudulent information about Individual G, including that Individual G:

(a) intended to use the property as his/her primary residence;

(b) was employed as the “chief operating officer” at E&H Distributors earning

$20,000 gross income per month; and

(c) held Citibank bank accounts carrying a combined balance of approxinately

$794,500.

As defendants YASEEN AHMED and ELIOT HIGUEROS knew, the information concerning

Individual G’s employment, income, assets, and intent to occupy the residence was false.


HIGUEROS knowingly caused to be prepared and submitted, a HUD-1 Settlement Statement that,

among other things, failed to disclose the true source of the down payment and the payment made

to Individual G for purchasing 1349 North Sedgwick Street, Unit 4N, Chicago, Illinois.

75. It was further part of the scheme that, on or about June 24, 2008, as a result of the

submission of the fraudulent loan application and supporting documents, defendants YASEEN

AHMED and ELIOT HIGUEROS knowingly caused Gateway Capital Mortgage Corporation to

fund a mortgage loan in the amount of approximately $1,010,811 to finance Individual G’s purchase

of 1349 North Sedgwick Street, Unit 4N, Chicago, Illinois.

76. It was further part of the scheme that, on or about June 24, 2008, as a result of the

29

submission of the fraudulent loan application and supporting documents, defendants YASEEN

AHMED and ELIOT HIGUEROS knowingly caused the title company to make the following

disbursement from the fraudulently obtained mortgage proceeds for1349 North Sedgwick Street,

Unit 4N, Chicago, Illinois: approximately $336,697 to Vertex Investment Group.


HIGUEROS, RAZZAK KHADER, THEODORE CARDENAS, JOHN WELCH, AMANDA

FANARO, and KRISTIN DAUGHERTY misrepresented, concealed, and hid, and caused to be

misrepresented, concealed, and hidden, the true purpose of the acts done in furtherance of the

scheme.

78. On or about May 14, 2007, at Chicago, in the Northern District of Illinois, Eastern

Division, and elsewhere,

YASEEN AHMED, ELIOT HIGUEROS,

RAZZAK KHADER and KRISTIN DAUGHERTY,

defendants herein, for the purpose of executing the aforesaid scheme to defraud, knowingly caused

to be transmitted by means of wire communication in interstate commerce, certain writings, signs,

and signals, namely, an interstate wire transfer through the Federal Reserve system of approximately

$170,862 from an American Broker’s Conduit account at Deutsche Bank Trust CO Americas to a

Traditional Title Company account at LaSalle National Bank, which funds represented the proceeds

of a mortgage loan from American Broker’s Conduit, to finance the purchase of 4725 South

Michigan Avenue, Unit 1C, Chicago, Illinois;

In violation of Title 18, United States Code, Sections 1343 and 2.

30

COUNT TWO

The SPECIAL SEPTEMBER 2011 GRAND JURY further charges:

1. The allegations in paragraphs 1 through 77 of Count One of this indictment are

incorporated here.




RAZZAK KHADER, and KRISTIN DAUGHERTY,




$175,276 from a Lehman Brothers Bank account at Lehman Brothers Bank FSB to a Traditional

Title Company account at LaSalle National Bank, which funds represented the proceeds of a

mortgage loan from Lehman Brothers Bank, to finance the purchase of 4725 South Michigan

Avenue, Unit 3B, Chicago, Illinois;


31

COUNT THREE


1. The allegations in paragraphs 1 through77 of Count One of this indictment are

incorporated here.




THEODORE CARDENAS, and JOHN WELCH,




$157,177 from a First Magnus Financial Corporation account at Washington Mutual Bank FA to a

Traditional Title Company account at LaSalle National Bank, which funds represented the proceeds

of a mortgage loan from First Magnus Financial Corporation, to finance the purchase of 4725 South

Michigan Avenue, Unit 3C, Chicago, Illinois;


32

COUNT FOUR



incorporated here.

2. On or about June 5, 2007, at Chicago, in the Northern District of Illinois, Eastern







$157,966 from a First Franklin Financial Corporation account at PNC Bank of Ohio to a Traditional


mortgage loan from First Franklin Financial Corporation, to finance the purchase of 4725 South

Michigan Avenue, Unit GD, Chicago, Illinois;


33

COUNT FIVE



incorporated here.








$165,929 from an IndyMac Bank FSB account at IndyMac Bank FSB to a Traditional Title

Company account at LaSalle National Bank, which funds represented the proceeds of a mortgage

loan from IndyMac Bank FSB, to finance the purchase of 4725 South Michigan Avenue, Unit 2F,

Chicago, Illinois;


34

COUNT SIX



incorporated here.




THEODORE CARDENAS, and KRISTIN DAUGHERTY,




$158,937 from a Washington Mutual Bank account at Washington Mutual Bank FA to a Traditional

Title Company account at LaSalle National Bank, which funds represented proceeds of a mortgage

loan from Washington Mutual Bank, to finance the purchase of 4725 South Michigan Avenue, Unit

2C, Chicago, Illinois;


35

COUNT SEVEN



incorporated here.




RAZZAK KHADER, and AMANDA FANARO,




$206,049 from an American Broker’s Conduit account at Bank of New York City to a Traditional


mortgage loan from American Broker’s Conduit, to finance the purchase of 4725 South Michigan

Avenue, Unit GA, Chicago, Illinois;


36

COUNT EIGHT



incorporated here.




RAZZAK KHADER, and AMANDA FANARO,




$209,554 from a CitiMortgage Inc. account at Citibank NA to a Traditional Title Company account

at LaSalle Bank, which funds represented the proceeds of a mortgage loan from CitiMortgage Inc.,

to finance the purchase of 4725 South Michigan Avenue, Unit 4A, Chicago, Illinois;


37

COUNT NINE



incorporated here.

2. On or about July 27, 2007, at Chicago, in the Northern District of Illinois, Eastern



THEODORE CARDENAS, and AMANDA FANARO,




$171,831 from a Wachovia Mortgage Corporation account at Wachovia Bank NA to a Professional

National Title Network account at Fifth Third Bank, which funds represented the proceeds of a

mortgage loan from Wachovia Mortgage Corporation, to finance the purchase of 3318 West Monroe

Street, Unit G, Chicago, Illinois;


38

COUNT TEN



incorporated here.

2. On or about January 9, 2008, at Chicago, in the Northern District of Illinois, Eastern


ELIOT HIGUEROS,

defendant herein, for the purpose of executing the aforesaid scheme to defraud, knowingly caused



$1,751,987 from a Washington Mutual Bank account at Washington Mutual Bank, to a Traditional


mortgage loan from Washington Mutual Bank, to finance the purchase of 2012 West Thomas Street,

Chicago, Illinois;

In violation of Title 18, United States Code, Section 1343.

39

COUNT ELEVEN



incorporated here.



YASEEN AHMED and ELIOT HIGUEROS,




$1,010,811 from a Gateway Capital Mortgage Corporation account at Flagstar Bank FSB to a

Primary Title Services account at Amcore Bank, which funds represented the proceeds of a

mortgage loan from Gateway Capital Mortgage Corporation, to finance the purchase of 1349 North

Sedgwick Street, Unit 4N, Chicago, Illinois;


40

FORFEITURE ALLEGATION

The SPECIAL SEPTEMBER 2011 GRAND JURY further alleges:

1. The allegations in Counts One through Eleven of this indictment are realleged here

for the purpose of alleging forfeiture to the United States pursuant to Title 28, United States Code,

Section 2461(c) and Title 18, United States Code, Section 981(a)(1)(C).

2. As a result of the violations as alleged in Counts One through Eleven of the foregoing

indictment,

YASEEN AHMED, ELIOT HIGUEROS, RAZZAK KHADER,

THEODORE CARDENAS, JOHN WELCH,

AMANDA FANARO, and KRISTIN DAUGHERTY,

defendants herein, shall forfeit to the United States any and all right, title, and interest they may have

in any property, real and personal, which constitutes and is derived from proceeds traceable to the

offenses charged in Counts One through Eleven.

3. The interests of the defendants subject to forfeiture to the United States pursuant to

Title 18, United States Code, Section 981(a)(1)(C) as incorporated by Title 28, United States Code,

Section 2461(c), include but are not limited to approximately $8,820,630.

4. If any of the forfeitable property described above, as a result of any act or omission

by defendants:

(a) cannot be located upon the exercise of due diligence;

(b) has been transferred or sold to, or deposited with, a third party;

(c) has been placed beyond the jurisdiction of the court;

41

_____________________________

______________________________

(d) has been substantially diminished in value; or

(e) has been commingled with other property which cannot be divided

without difficulty;

the United States of America shall be entitled to forfeiture of substitute property pursuant to the

provisions of Title 21, United States Code, Section 853(p), as incorporated by Title 28, United States

Code, Section 2461(c);

All pursuant to Title 28, United States Code, Section 2461(c) and Title 18, United States

Code, Section 981(a)(1)(C).

A TRUE BILL:

FOREPERSON

UNITED STATES ATTORNEY

42

Documents

UNITED STATES DISTRICT COURT EASTERN DIVISION ELIOT ... · RAZZAK KHADER, ) THEODORE CARDENAS, ) JOHN WELCH, ) AMANDA FANARO, and ) KRISTIN DAUGHERTY ) COUNT ONE . The SPECIAL SEPTEMBER